Andrés Velasco: The Challenge of Monetary Independence: "By shadowing the US Federal Reserve so closely, Latin American countries are foregoing the policy flexibility that their floating exchange-rate regimes are intended to allow. They also risk relying too heavily on possible US interest-rate cuts to boost their economies, and not enough on deeper, long-term reforms...

Comment of the Day: JEC: "This sentence: 'This high-stakes approach was much criticised by liberals, who feared nuclear Armageddon more than they feared the consequences of appeasing the Soviet Union...' It tells you everything you need to know about Niall Ferguson. Well, that and the fact that Ferguson imagines this to be a sick burn on the 'liberals', rather than an acknowledgment of their obviously superior wisdom, prudence, and foresight...

KJV: John 5: "Now there is at Jerusalem by the sheep market a pool, which is called in the Hebrew tongue Bethesda, having five porches. In these lay a great multitude of impotent folk, of blind, halt, withered, waiting for the moving of the water. For an angel went down at a certain season into the pool, and troubled the water: whosoever then first after the troubling of the water stepped in was made whole of whatsoever disease he had...

Edward Luce: Ivanka Trump and the Rise of the Stepford Daughter: "The first daughter’s drive to improve the skills of American workers mainly involves photo-ops. Washington’s most surreal event this week—an absurdly high bar—was Ivanka Trump’s roll-out of her workforce development council. It opened with her father calling the chief executive of America’s largest smartphone company 'Tim Apple'. Tim Cook barely flinched...

Benjamin Dreyer: Jeanine Pirro was permanently banned from Leonard’s of Great Neck after she tried to walk out with a table floral arrangement from a bat mitzvah she wasn’t even attending. So grain of salt on the constitutional scholarship...

Paul N. Van de Water: [More Evidence of Post-ACA Slowdown in Health Care Spending(https://www.cbpp.org/blog/more-evidence-of-post-aca-slowdown-in-health-care-spending): "In early 2010 we projected that federal debt would reach 289 percent of gross domestic product (GDP) by 2048; we now project 113 percent of GDP. Over half of that improvement stems from lower health care costs; the rest largely reflects lower interest rates. Although health care costs remain a major driver of future increases in federal spending, that shouldn’t obscure how much their projected costs have fallen in recent years...

Pete Buttigieg: On Pence's support of Trump: "How could he allow himself to become the cheerleader of the porn star presidency. Is it that he stopped believing in scripture when he started believing in Donald Trump?...

Microeconomic Insights: About: "Microeconomic Insights is a home for accessible summaries of high quality microeconomic research which informs the public about microeconomic issues that are, or should be, in the public’s eye...

Edited for Coherence and Clarity

Al Hunt: Brad Delong, a Rubin Democrat, a mainstream, a Clinton-Obama Democrat, if you will, has said in the [intra-]democratic wars: My side has lost. We can't form any coalitions with [even] a handful of moderate Republicans. Cap-and-trade was a Republican idea. Every single Republican basically turned their back.

Uh, Brad, are you there?...

As soon as you're with us, let us know.

Brad, you hit the smiley face.

We are going to ask Brad what this means for the Democratic Party’s [position] on major economic issues.

I think we have Brad, right?

Brad DeLong: [The Machine] says I am here.

Al Hunt: Terrific. I'm talking about your vox[.com] interview. I also note that you are one of the 750 most influential economists. James and I hope to be one of the 70,000 most influential podcasters at some point. We once again have been elevated by our guests.

James [Carville], let me turn it over to you to ask the first couple of questions to Brad about his new thesis.

Weekend Reading: What I think of James Carville, but substitute in "Bill Clinton" for "Willie", and substitute in "James Carville" for "Sadie Burke": Robert Penn Warren: All the King's Men: "He announced in the Democratic primary.... It was hell among the yearlings and the Charge of the Light Brigade and Saturday night in the back room of Casey's saloon rolled into one, and when the dust cleared away not a picture still hung on the walls.... There was just [Bill Clinton], with his hair in his eyes and his shirt sticking to his stomach with sweat. And he had a meat ax in his hand and was screaming for blood. In the background of the picture, under a purplish tumbled sky flecked with sinister white like driven foam, flanking [Bill Clinton]... [James Carville]...

From any sensible risk-management perspective, the Fed ought to have been cutting interest rates for the past month. Yet it has not been. They seem to me to bet playing a game not of "risk management" but rather "let's pretend we have not wedged ourselves into a corner and should be working much harder to get out of it":

Jon Hilsenrath and Nick Timiraos: Central Banks Play a Game of Risk Management: "The world’s central banks are engaged in a major policy reversal to prevent the world economy from sinking into unexpected recession... calling off interest-rate increases.... In many cases, the central bankers are boxed in, with few policy tools available to cushion their economies.... Six months ago, Fed officials thought they would raise short-term interest rates three times in 2019 on the way toward a policy rate near 3.5% in 2020. Fed officials recently signaled they have paused for now, with short-term rates just below 2.5%. Their actions and words strongly suggest they could be done altogether.... They have unlimited space to fight accelerating inflation with higher interest rates and little-to-no space to fight slowing inflation with lower rates.... The risk may be diminished after the latest reversal by central banks, but it’s hardly gone...

Miranda Aldersley: The Girl Who Executed Nazis after Seducing Them in Bars Dies Aged 92: "Freddie Oversteegen... with her older sister Truus and their friend Hannie Schaft... blew up bridges and railway tracks with dynamite, smuggled Jewish children out of concentration camps and executed as many Nazis as she could, using a firearm hidden in the basket of her bike.... First approach the Nazi men in bars, and, having successfully seduced them, ask if they wanted to 'go for a stroll' in the forest, where, as Freddie herself put it, they would be 'liquidated'.... 'It was a necessary evil, killing those who betrayed the good people'. When asked how many people she had killed or helped kill, she demurred: 'One should not ask a soldier any of that'.... She was the last surviving member of the Netherlands' most famous female resistance cell...

Larry Kudlow (December 7, 2007): Bush Boom Continues: "There’s no recession coming. The pessimistas were wrong. It’s not going to happen. At a bare minimum, we are looking at Goldilocks 2.0. (And that’s a minimum). Goldilocks is alive and well. The Bush boom is alive and well. It’s finishing up its sixth consecutive year with more to come. Yes, it’s still the greatest story never told...

Larry Kudlow (February 5, 2008): “I’m going to bet that the economy will be rebounding sometime this summer, if not sooner. We are in a slow patch. That’s all. It’s nothing to get up in arms about...

Even though the first quarter of 2019 is only three-quarters over, practically all of the private-sector decisions that will determine the level of economic growth from the first quarter of 2018 to the first quarter of 2019 have already been made. Moreover, because of a statistical quirk 8/9 of the components of the growth rate have already occurred, and we have reasonable data on 2/3 of the components. So the Federal Reserve Bank of New York's forecast that the first-quarter growth rate will be only 1.4% is now a semi-solid thing: you cannot take it to the bank, but you can borrow on it (the last three month-out misses were 0, +0.2, and -0.4 respectively):

It's not a recession. But it is clear that even if 2.5% were the right target for the short safe nominal interest rate two months ago, it is not the right target for the short safe nominal interest rate now. The Fed should cut.

It is far from clear to me that the risk of a U.S. recession this year is low. The risk that a recession will be called is low. The risk that a recession will start is 30%:

Gavyn Davies: Alarm Bells Ring for the Goldilocks World Economy: "Markets seem willing to overlook the continuing slowdown in the advanced economies, which has taken the latest growth rate to only 0.8 per cent.... This is perversely seen as good news because it will reduce the likelihood of further interest rate increases.... The dovish turn in US monetary policy has been confirmed by an unusual volte-face in policy guidance by the Fed leadership in the space of a few weeks.... This phase of the cycle is often described as the Goldilocks zone, in which growth — like the heroine’s porridge in The Story of the Three Bears—is neither too hot nor too cold.... Meanwhile, growth is still high enough to indicate that the risk of outright recession in the next 12 months remains close to zero.... While the US is still clinging to the middle of the Goldilocks zone, the eurozone is flirting with the bottom boundary of its zone. Any further decline in the nowcast would see a large increase in the probability of a European recession this year. With the Japanese nowcast already in negative territory and Asian trade flows headed sharply downwards, the markets may not be able to ignore much further weakness in the world economy...

Let me hoist this from last year: Kate Bahn summarizing the evidence that imposing work requirements simply does not work: it has none of the benefits that people wish that it would have, and all of the drawbacks you can think of: Kate Bahn: Work Requirements for U.S. Public Assistance Programs Don’t Work: "Analysis from the Center on Budget and Policy Priorities finds that imposing work requirements simply doesn’t work. One reason is because increased red tape may lead to eligible recipients losing their benefits even though they are eligible for them. People with volatile work hours or who hold multiple jobs may have a hard time collecting and submitting sufficient documentation to demonstrate they are working regularly. As CBPP points out, completing work-requirement red tape is even harder for self-employed workers, which should be cause for concern as gig-based employment becomes more prevalent...

Comment of the Day: JEC: "This sentence: 'This high-stakes approach was much criticised by liberals, who feared nuclear Armageddon more than they feared the consequences of appeasing the Soviet Union...' It tells you everything you need to know about Niall Ferguson. Well, that and the fact that Ferguson imagines this to be a sick burn on the 'liberals', rather than an acknowledgment of their obviously superior wisdom, prudence, and foresight...

Marcy Wheeler: Art of the Get-Screwed-in-Your-Russian-Quid-Pro-Quo Deal: "Putin’s election year operation exacerbated the polarization between Democrats and Republicans such that most Republicans and a goodly number of Democrats have been unable to step back and say, holy shit, this country got attacked and we need to come together to do something about it. Trump’s win got Republicans to fear Trump’s base so much that they care more about those fevered hordes than doing what is right for this country. And Democrats rightly want to punish Trump for cheating, but haven’t thought about what a least-damaging off-ramp for that cheater might look like. Putin doesn’t care if Trump benefits... though he is happy to keep toying with Trump like a cat plays before he eviscerates his mouse.... There are multiple ways for him to get a win out of this, whether or not Trump manages to eke out any kind of real payoff... Putin isn’t the only one playing this game. Certainly, Mohammed bin Salman feels the same way, even if his record of ruthless dealmaking is shorter and sloppier than Putin’s.... Donald Trump and Jared Kushner are easy marks for a whole range of skilled operators willing to stroke their egos and dangle loot... to the detriment of the interests of the United States. That they are so bad at deal making in no way disproves their culpability. There is no Trump Tower in Moscow. But there never had to be. All that was needed was the promise of a ridiculously lucrative narcissism-stroking deal for the Trump family to agree to shit that would hurt this country. And all the evidence suggests that they did, and continue to do so...

Melissa Dell: The Persistent Effects of Peru’s Mining Mita: "This study utilizes regression discontinuity to examine the long-run impacts of the mita, an extensive forced mining labor system in effect in Peru and Bolivia between 1573 and 1812. Results indicate that a mita effect lowers household consumption by around 25% and increases the prevalence of stunted growth in children by around 6 percentage points in subjected districts today. Using data from the Spanish Empire and Peruvian Republic to trace channels of institutional persistence, I show that the mita’s influence has persisted through its impacts on land tenure and public goods provision. Mita districts historically had fewer large landowners and lower educational attainment. Today, they are less integrated into road networks and their residents are substantially more likely to be subsistence farmers...

Financial Times: The ECB Is Attempting to Get Ahead of Events: "The European Central Bank’s U-turn this week—reviving part of its stimulus programme after two years of weaning the eurozone off easy money—took markets by surprise. It should not have done. Signs of eurozone weakening, especially in Germany, and in key partners such as China, had been evident for months. Once the US Federal Reserve signalled a pause before lifting rates again, the ECB became likely to follow suit. In his final months in the role, ECB president Mario Draghi is clearly trying to get ahead of events. Less clear is whether the bank has done enough, or has the means to do so, if the weakening continues...

Nick Rowe: Reverse-Engineering the MMT Model: "The MMT AD curve is vertical.... Fiscal policy can be used, and must be used, because this model, with its vertical AD curve, has no inherent tendency towards 'full employment' output...

John Quiggin: Monopoly: Too Big to Ignore: "Two hundred years after the birth of Karl Marx and fifty years after the last Western upsurge of revolutionary ferment in 1968, the term 'monopoly capitalism' might seem like a relic of outmoded enthusiasms. But economists are increasingly coming to the view that monopolies, and associated market failures, have never been a bigger problem...

Mary Beard: The Public Voice of Women: "As Homer has it, an integral part of growing up, as a man, is learning to take control of public utterance and to silence the female of the species.... Telemachus... says ‘speech’ is ‘men’s business’... authoritative public speech (not the kind of chatting, prattling or gossip that anyone–women included, or especially women–could do)...

Who Will Donald Trump Turn Out To Be?: "We have very little indication of what policies Donald Trump will try to follow or even what kind of president he will be. The U.S. press corps did an extraordinarily execrable job in covering the rise of Trump—even worse than it usually does. Even the most sophisticated of audiences—those interested in asset prices and how they are affected by government policies—have very little insight into Trump's views or those of his key associates...

Yes, it is time for the center-left to pass the baton. But what does that mean, concretely, for policies? Paul Krugman gives his opinion: Paul Krugman: "A few thoughts inspired by @delong's 'Brad is really saying two things...

Andrei Markevich: Russia in the Great War: Mobilisation, Grain, and Revolutio: "The economics and politics of the Russian grain and labour markets.... It was impossible simultaneously to mobilise 15 million males into the Russian army, procure the grain to feed them as soldiers, and avoid revolution...

Wikipedia: Posset: "A posset (also historically spelled poshote, poshotte) was originally a popular British hot drink made of milk curdled with wine or ale, often spiced, which was often used as a remedy...

Wikipedia: IBM 1620 - : "Many in the user community recall the 1620 being referred to as CADET, jokingly meaning 'Can't Add, Doesn't Even Try', referring to the use of addition tables in memory rather than dedicated addition circuitry.... The internal code name CADET was selected for the machine. One of the developers says that this stood for 'Computer with ADvanced Economic Technology', however others recall it as simply being one half of 'SPACE-CADET', where SPACE was the internal code name of the IBM 1401 machine, also then under development...

Wikipedia: Charles, Duke of Orléans: "24 November 1394 – 5 January 1465: Now remembered as an accomplished medieval poet owing to the more than five hundred extant poems he produced, written in both French and English, during his 25 years spent as a prisoner of war and after his return to France...

Alexandria Ocasio-Cortez: Automation Is a Good Thing: "In a talk at SXSW, the New York Congresswoman notes that automation is a net positive when the government offers a social safety net...

Marcy Wheeler: @emptywheel: "There's a belief among Russian denialists that bc there's not a Tower in Moscow w/Trump's name on it, the conspiracy didn't happen. That's now how conspiracy law works...

Jong-Wha Lee: Lessons of East Asia’s Human-Capital Development: "Developing countries should be placing a high priority on boosting human capital. The experience of East Asia’s prosperous economies holds valuable lessons.... A child born today in Singapore will be 88% as productive when she grows up as she could be if she enjoyed complete education and full health. In Sub-Saharan Africa, by contrast, a child will be only 40% as productive. Globally, 57% of all children born today will grow up to be, at best, half as productive as they could be.... Public policy was central to this success, with East Asian leaders ensuring that economic-development plans and associated measures always accounted for human-capital objectives. In South Korea, each of the five-year development plans implemented from 1962 to 1996 contained action plans for manpower development, including education and training policies...

Doug Jones: Coals to Newcastle: "320-304 million years ago: It seems like Gaia really went on a bender in the late Carboniferous, getting drunk on oxygen. By some estimates, the atmosphere was over 30% oxygen back then, compared to 21% today. Living things took advantage of the opportunity. Insects apparently face an upper limit in size because they rely on diffusion through tracheas instead of forced respiration through lungs to get oxygen into their bodies. With more oxygen in the air, this limit was raised. The Carboniferous saw dragonflies with a wingspan up to 70 centimeters, and body lengths up to 30 centimeters, comparable to a seagull...

The past year has seen one-fifth of the jump in investment that the boosters of the Trump tax cut were claiming would happen back in last 2017. One fifth. And I haven't seen a peep from anyone even expressing curiosity on why their miss was so great: Tyler Cowen (November 2017): Yes, a Corporate Tax Cut Would Increase Investment: "A common criticism of the current Republican tax plans is that they will not boost private investment. While I have major reservations about these plans as a whole, this particular objection is oversold. The most likely result is that lower corporate tax rates will lead to more investment projects and thus more aggregate economic activity.... When companies have more 'free cash' at hand, they tend to invest more.... The... 'giveaway' to business... is precisely the mechanism that tends to boost investment...

Odd from the usually-reliable and very smart Mohamed A. El-Erian. Yes, the great and good were much too optimistic a year ago—but that is not economists' fault, save for those economists who have betrayed their calling by becoming cheerleaders for Trump, Brexit, austerity, and plutocracy. Yes, the Federal Reserve needs reform—but its decisions that it does not are not the fault of we outsiders who have been pointing out how it might do better. And on Trump's trade war with China... the major things that need to be said are political and administrative: Trump and his administration are incompetent, and everything they touch turns to s---, so game-theoretic and welfare-economic disquisitions on how to manage trade are simply beside the point:

Mohamed A. El-Erian: Why Economics Must Get Broader Before It Gets Better: "In...12... went from celebrating a synchronized global growth pickup to worrying about a synchronized global slowdown.... Neither the extent nor the speed of the change in consensus seems warranted by economic and financial developments, which suggests that economists may have misdiagnosed the initial conditions.... Professional economists still have not spoken up clearly enough about the challenges facing the US Federal Reserve’s communication strategy.... Economists should be urging the Fed to adopt an approach more like that of the Bank of England, which emphasizes scenario analyses and fan charts. Economists could also be doing more to inform–and perhaps even influence—the Fed’s ongoing review of its policy frameworks and communications strategy.... The Sino-American trade conflict.... The vast majority of economists have trotted out the conventional argument that tariffs (real or threatened) are always bad.... Those who wanted to make a productive contribution to the debate should have taken a more nuanced approach, applying tools from game theory to distinguish between the 'what' and the 'how' of trade warfare. These are just three recent examples of how economists have dropped the ball...

Excellent testimony from Heather Boushey, our Fearless Leader at the WCEG. But am I allowed to whimper that focusing too much on the EITC and the CTC may distract attention from the fact that SSI and SSDI are broken, and that the interface between the safety net for the employed and the safety net for the non-employed is very broken?: Heather Boushey: Testimony Before the Ways and Means Committee: "At the bottom end, one easy step is to preserve and expand evidence-backed refundable tax credits like the Earned Income Tax Credit and the Child Tax Credit, which lifted 8.9 million American out of poverty in 2017. In the middle, it is important to make sure the fruits of growth are widely shared and to make the economy work for workers and families. Some proven ways to do this include making sure every family can afford to send their children to high quality, affordable childcare and offering a national paid family and medical leave. It can also mean investing in infrastructure. And we need to know much more about the top. Many of the statistics we rely on to inform us about the state of our economy are measures of the average...

Why the focus of the Republican business lobby's power in the areas of tax cuts and deregulation alone? Why the lack of concern for business complaints about "immigration crackdown[s]... tariff wars... government shutdowns"? One large piece of the answer, I think, is gerentocracy—the transformation of the Republican base, even the rich base, into a group of relatively old people who no longer see change as their potential friend and entrepreneurship as even possible for them, but who seek solely to hold on to their rents: Edward Luce: The Fading of the US Multinational Lobby: "When Apple’s iPhone sales undershoot, as they did last week, China suffers. Or so the theory goes.... What is bad for some of America’s biggest brands is apparently good for its president. It is hard to overstate the departure from how US presidents normally behave...

W. V. Harris: Roman Power: A Thousand Years of Empire(9781107152717): "William V. Harris sets out to explain, within an eclectic theoretical framework, the waxing and eventual waning of Roman imperial power, together with the Roman community's internal power structures (political power, social power, gender power and economic power). Effectively integrating analysis with a compelling narrative, he traces this linkage between the external and the internal through three very long periods, and part of the originality of the book is that it almost uniquely considers both the gradual rise of the Roman Empire and its demise as an empire in the fifth and seventh centuries AD. Professor Harris contends that comparing the Romans of these diverse periods sharply illuminates both the growth and the shrinkage of Roman power as well as the Empire's extraordinary durability...

Today's Republican Party is grifters all the way down: American Enterprise Institute edition:. And the New York Times loves to give them space, space, and more space:

Mark Schmitt: mschmitt9: "Am I the only one who remembers that this is the same @arthurbrooks who published a book in 2010 called +The Battle_, literally calling for 'a culture war' over economic policy??: Arthur Brooks: @arthurbrooks: 'Contempt makes persuasion impossible — no one has ever been hated into agreement, after all—so its expression is either petty self-indulgence or cheap virtue signaling, neither of which wins converts... https://www.nytimes.com/2019/03/02/opinion/sunday/political-polarization.html

Mark Thoma sends us to: Stumbling and Mumbling: The 1% vs the 0.1%: "Many of you might react to the FT’s story about the 'squeezed 1%' by getting out the world’s smallest violin. I think this is a mistake. It reminds us that the damage done by inequality extends beyond the general social and economic harm. It hurts even those who are a long way up the income ladder...

Kevin Drum: Here’s Why Liz Cheney Voted Against the Anti-Semitism Resolution: "On Thursday the House finally took up its resolution opposing anti-semitism, and it passed unanimously among Democrats. However, 23 Republicans voted against it. Here is Rep. Liz Cheney.... Cheney made it clear that unless the resolution was specifically aimed at a Democrat, it wasn’t worth voting for. It’s hard to see why anyone wouldn’t see this as the principled stand that it is...

Weekend Reading: Lara Putnam and Gabriel Perez-Putnam: What Dollar Stores Tell Us About Electoral Politics: "Roughly 200 of the 3,200-odd counties in the United States have a Whole Foods. No more than 650 have Cracker Barrels. A swingy, politically diverse state like Pennsylvania has fourteen Whole Foods, twenty-five Cracker Barrels, and sixty-seven counties. Six Pennsylvania counties have both, and forty-three have neither. Here’s a better way to track hardship across space: SNAP-authorized dollar stores. There are over 30,000 dollar stores in the United States, and about two-thirds of them are authorized to accept Supplemental Nutrition Assistance Program payments. Each SNAP-authorized dollar store location reflects a series of specific locational assessments: that rent here is low, low-income demand is high, and the number of folks on food stamps who will rely on this store for groceries will make up for the cost of stocking goods that meet USDA authorization criteria. It’s no surprise, then, that congressional districts with more SNAP-authorized dollar stores are less well off, with lower life expectancies, lower educational attainment rates, and lower median incomes...

Lying Liar Kevin Hassett Lies Again...: I have here a transcript from a week or so ago of Kevin Hassett on Fox Business telling transparent lies. Seriously: why does he bother? What does he gain? Is it really the case that AEI will have him back after things like this? WILL banks like JPM Chase will pay him to speak to conferences? If so, they have really really really really bad judgment...

Cathy Young: Who’s Afraid of The Bulwark?: "I don’t know what The Bulwark’s endgame is, but right now, it’s among a deplorably small number of outlets that get high marks for intellectual diversity and integrity...

Ursula Vernon: An Unexpected Honor,: "Now, you’re probably all asking what whalefall has to do with awards ceremonies, or science fiction novelettes, and the answer is: absolutely nothing. But how often do I get to tell an audience this size about whalefall? So, thanks to my publishers, my husband Kevin, and thank you all. I’m glad you liked my story. Y’all have a good night...

Doug Jones: Devonian Days: "401-380 million years ago... the Devonian: Forests are spreading. The first tree, Wattieza, is kin to ferns and horsetails. It stands 10 meters tall. No leaves yet, just fronds. The first forests will absorb carbon dioxide, and cool the planet. Life is moving onto land... the 'fishapod' discovered in 2006... with both lungs and gills...

I have here a transcript from a week or so ago of Kevin Hassett on Fox Business telling transparent lies. Seriously: why does he bother? What does he gain? Is it really the case that AEI will have him back after things like this? WILL banks like JPM Chase will pay him to speak to conferences?

If so, they have really really really really bad judgment:

7:38:49 BARTIROMO: The Atlanta Federal Reserve on Friday issued its GDP forecast for the first quarter, it’s three-tenths of a percent. What was your reaction to this? I know that this changes a lot, by the way...

7:38:59 HASSETT: Sure it does, yeah...

7:39:00 BARTIROMO: You’ll probably revise it umpteen times, but 0.3%, obviously not great for the first quarter...

7:39:05 HASSETT: Right, well there are two things going on. The first is that we started the quarter out with a 300,000 jobs number, north of 300,000. And most of the time when you do that, you end up with a 3% quarter. And so we’re gonna get jobs again this week, and if we get another really big number, and I think we’ll have a lot of confidence that something as low as three-tenths isn’t gonna happen. But there is this weird pattern in the data all the way back to 2010, that the first quarter tends to be about 1% below the average for the year. So if we think as we do at the White House that we’re gonna have about a 3% year, then right now, if you wanted me to put a number on the table, I’d say it’s probably gonna be about a 2% first quarter.

7:39:38 BARTIROMO: Okay, so is that largely because of the shutdown, or what happened in the first quarter...

7:39:41 HASSETT: No, it’s because of the seasonality thing, they don’t seasonally adjust the data correctly in Q1, it’s a weird technical thing. And you know, we could go to the blackboard, I know you’d love it, but your viewers would probably never get me invited back again...

It says an awful lot of true things. The average "neutral" 10-year safe real interest rate consistent with full employment in the Global North does look like it has fallen from 4% per year in the 1990s to -0.5% per year today. That does pose a huge problem for central banks that seek to use monetary policy s as the principal depression-fighting tool: a small negative shock that reduces this rate by only a little bit more would drive an economy into territory where the central bank cannot do its job. During this period of decline, increased government debts have put perhaps 2%-points of upward pressure on the neutral rate: the actual decline has been 6.5%-points.

But I find myself uncertain on what conclusions to draw from their paper. They focus on only one of what I think are three key interest-profit-discount rates in play here:

There is the (short or long) real safe interest rate on the securities of governments that issue reserve currencies and thus possess exorbitant privilege. This is down to today's -0.5% from 3% 20 years ago and 4.5% 40 years ago.

There is the long-term real risky discount rate at which the cash flows accruing to owners of capital are discounted in the market—the expected return on financial investments in stocks. This is at to 5% today, up from 4% 20 years ago, down from 12% 40 years ago, and down from 6% 50 years ago.

There is the societal profit rate earned by new investments in physical or intellectual capital. This is ??? to today's ???, from ??? 20 years ago and from ??? 40 years ago.

This third social profit rate is in some sense the fundamental opportunity-benefit-of-investment ground out by the real economy of production and distribution on top of which the financial superstructure is built.

The second is the quotient of profit flows over the market value stock, and takes the societal profit rate returns to society's capital and adds to them the amount of monopoly rents captured by enterprises, subtracts from them labor rents and spillover benefits, both organizational and technological, that are not captured by those who undertake the actions that generate those spillovers, and then values those cash flows at the long-term risky discount rate.

The first of safe interest rate is the second minus the liquidity and safety terms that lower the required rate of return on safe assets.

Łukasz Rachel and Lawrence H. Summers focus on rate (1): the (short or long) real interest rate on the safe securities of governments that issue reserve currencies and thus possess exorbitant privilege. The problem is that the wedge between this (1) safe interest rate and the risky discount rate (2)—the rate at which risky cash flows are discounted—is worse than poorly understood by economists: it is not understood at all.

Victor Davis Hanson has decided that he is an evil person who does evil by telling lies in support of other evil people.

He has stopped resisting.

He has recognized that this is his nature: to be a one-man definitive refutation to Sokrates's doctrine that nobody does evil knowingly:

Gabriel Schofield: Sophistry in the Service of Evil : "Mounting a persuasive case for the presidency of Donald Trump turns out to be a problematic enterprise.... Throughout Trump’s career, blatant racial prejudice has been a continuous thread.... Hanson... acknowledges that Trump was 'likely wrong' in holding the view that Judge Curiel harbored some innate bias. But Trump, he continues, was merely 'clumsy in his phraseology' and, moreover, his identification of the American-born judge as Mexican was actually 'correct', explaining that there is never a 'commensurate outcry about identifying Swedish Americans as "Swedes" or using "the Irish" for Irish Americans'. From beginning to end, Hanson’s treatment of this episode is an exercise in sophistry. Was Trump wrong or was he just “likely” wrong—Hanson’s equivocating interpolation—about Judge Curiel’s innate bias as a “Mexican”? Racism is America’s original sin, a sin that we as a nation have struggled long and hard to expiate. Yet with a drumbeat of racially charged remarks emanating from the White House, Trump has been setting the nation back to a darker time. Hanson’s casuistry about the Swedes and the Irish, and the gaping hole that is his treatment of Trump’s odious life-long record in matters of race, are worse than sophistry; they are sophistry in the service of a genuine evil. Hanson has also drunk deeply from the gourd of conspiratorial thinking. He goes on for pages about the nefarious 'deep state', which he claims has 'the unlimited resources of government at its call', and whose 'operating premises have embraced multiculturalism, feminism, and identity politics'.... It was not Trump’s but Hillary Clinton’s campaign that was tacitly colluding with Russia to manipulate the 2016 election. Trump, he insists, was actually 'a victim of Russian collusion at the very time he was being accused of it'...

Mike Konczal: The Failures of Neoliberalism Are Bigger Than Politics: "Here are two statement... I associate with left neoliberalism.... The first is that neoliberal policies would create more growth. Sure, inequality might increase, but so would wages; and even if not wages, mobility up and down the income ladder.... The second is that if we get government out of corporations’ way, the market would become more dynamic, competitive and innovative. Sure, there might be some level of profits and questionable behavior in the short term, but the market itself would fix it, such that in the long term the corporate sector looked much healthier in terms of profits and dynamism. I want to ground it this way, in two intellectual statements about the tradeoffs of a policy regime, to help understand why the confidence that left neoliberalism once held over the baseline assumption of economics has collapsed.... This is a matter of ideas: ideas having failed, and us needing new ones...

Douglass C. North, John Joseph Wallis,and Barry R. Weingast: A Conceptual Framework for Interpreting Recorded Human History: "Beginning 10,000 years ago, limited-access social orders developed that were able to control violence, provide order, and allow greater production through specialization and exchange... using the political system to limit economic entry to create rents, and then using the rents to stabilize the political system and limit violence.... This type of political economy arrangement... appears to be the natural way that human societies are organized.... In contrast, a handful of developed societies have developed open-access social orders. In these societies, open access and entry into economic and political organizations sustains economic and political competition. Social order is sustained by competition rather than rent-creation. The key to understanding modern social development is understanding the transition from limited- to open-access social orders, which only a handful of countries have managed since WWII...

Los Angeles Times: Today: A Trade and Truth Deficit: "Trump hasn’t been living up to a number of his biggest campaign promises, including reducing the trade deficit, but that hasn’t stopped him from boasting about them.... President Trump has long talked about reducing the trade deficit.... The gap in imported and exported goods soared to an all-time high last year, largely because of Trump’s policies. And it’s just one area where Trump is falling short of his own goals.... Facts haven’t stopped Trump from boasting about his record over and over again with exaggerations and outright untruths. But will he pay a political price among his supporters? Probably not. As Matt Schlapp, chairman of the American Conservative Union, put it: 'Maybe 50% of Americans look at Donald Trump as struggling to accomplish things, but the other 50% looks at him as willing to take on challenges other presidents weren’t'...

Yevgeny Simkin: You’re Not the Asshole Twitter Makes You Out To Be: "Twitter is the functional equivalent of shoving tens of millions of people into a closet, wrapping them in barbed wire, and pumping them full of PCP. It’s a miracle that anyone makes it out alive. The very fact that we volunteer to go in there is a testament to how badly we want to connect, and be heard, and maybe even understood because we feel like we’re standing here, all alone, shouting from the wilderness. So don’t fall for the narrative that humans are all a bunch of ill-tempered, arrogant, imbeciles filled with rage. Definitely don’t fall for that narrative if the evidence for it is Twitter. We’re not. Under the right circumstances these qualities, which exist to some small degree in everyone, can be illuminated and brought to the fore. Twitter is practically engineered to bring the worst out in people. But the real you is the one in the grocery store, not the one being cut off on the 405...

Financial Times: Republicans Are Craven in Their Loyalty to Trump: "A bigot, a cheat and a con artist who never expected to sell Americans on his ultimate scam: to become their president. In his portrait of Donald Trump this week, Michael Cohen went after what reputation his former client still enjoys.... How depressing... that Congressional Republicans did not do much more than impugn Mr Cohen. None mustered a substantive rebuttal of the allegations.... Not for the first time, the party finds itself in craven homage to a leader it does not even pretend is sound of character or judgment....Indeed, the party’s behaviour is consistently much more striking than Mr Trump’s.... The president is not an enigma at all. Any observant person had a sense of his temperament and ethics before (apparently to his own surprise) he was elected. Nothing his former fixer said about the president this week would have seemed implausible in 2016. It is the quickness of a great party to abase itself in his cause that continues to astonish...

Zack Beauchamp: The Virtue of Nationalism and Whiteshift: Books that Explain Trump: "The new reactionaries: Two new books reveal the coalition of far-right nationalists and anti-PC warriors who define the modern political right: Why has President Trump gone to such extraordinary lengths to build a wall on the Mexican border?... Ethnonationalism is behind the wall and Trump’s overall immigration policy, as well as his approach to racialized issues like civil rights and police violence. It explains his affinity with a host of powerful far-right European parties.... Few scholars are interested in turning the scattered political proposals of Trump and the European far right into a coherent political program. But recently, two new books shed light on what that could look like: Israeli scholar Yoram Hazony’s The Virtue of Nationalism and University of London professor Eric Kaufmann’s Whiteshift. One is a work of political philosophy, and the other a quantitative look at the demography and views of far-right supporters. One is written by an avowed conservative, the other by a self-described liberal. One is poorly reasoned (at best), the other tightly argued. What the two books have in common is that they go beyond articulating part of the ethnonationalist worldview to actively defending core parts of it...

The Weak Instruments Problem: "This is the weak instruments problem. As you get more and more data, wz/vz is not heading for zero, and even if it were your estimated βIV0 is not headed for β, but is rather headed for β+δ...

I Concede: The Haters and the Trolls and the Botnets of Macedonia Have Rendered Their Verdict, and I Accept It: @AustanGoolsbee has won,_ and will represent Neoliberal Economic Academia in the next round of the 2019 Chief Neoliberal Shill Twitter Challenge. Austan Goolsbee will face off against noted ex-academic and San Francisco flaneur @Noahpinion in the semifinals of the meetup region...

Can I pull it out at the last minute?: I'm still behind 53-47, in spite of a million-twitter-impression day yesterday: Neoliberal: @AustanGoolsbee (5) Former CEA Chair and Professor at U Chicago vs. @delong (4) Economic Historian at Berkeley...

Assiah: "Also known as Olam Asiyah, עוֹלָם עֲשִׂיָה in Hebrew, literally "the World of Action") is the last of the four spiritual worlds of the Kabbalah —Atziluth, Beriah, Yetzirah, 'Asiyah—based on the passage in Isaiah 43:7...

Wikipedia: Almost Famous: "Almost Famous is a 2000 American comedy-drama film written and directed by Cameron Crowe and starring Billy Crudup, Frances McDormand, Kate Hudson, and Patrick Fugit. It tells the story of a teenage journalist writing for Rolling Stone in the early 1970s, his touring with the fictitious rock band Stillwater, and his efforts to get his first cover story published... four Academy Awards nominations, including a win for Best Original Screenplay... 2001 Grammy Award for Best Compilation Soundtrack Album.... Roger Ebert hailed it the best film of the year as well as the ninth-best film of the 2000s. It also won two Golden Globe Awards, for Best Motion Picture–Musical or Comedy and Best Supporting Actress–Motion Picture (Hudson). In a 2016 international poll conducted by BBC, Almost Famous was ranked the 79th greatest film since 2000...

KJV: Isaiah 6: "In the year that king Uzziah died I saw also the Lord sitting upon a throne, high and lifted up, and his train filled the temple. Above it stood the seraphims: each one had six wings; with twain he covered his face, and with twain he covered his feet, and with twain he did fly. And one cried unto another, and said, "Holy, holy, holy, is the Lord of hosts: the whole earth is full of his glory". And the posts of the door moved at the voice of him that cried, and the house was filled with smoke. Then said I, "Woe is me! for I am undone; because I am a man of unclean lips, and I dwell in the midst of a people of unclean lips: for mine eyes have seen the King, the Lord of hosts". Then flew one of the seraphims unto me, having a live coal in his hand, which he had taken with the tongs from off the altar: And he laid it upon my mouth, and said, "Lo, this hath touched thy lips; and thine iniquity is taken away, and thy sin purged". Also I heard the voice of the Lord, saying, "Whom shall I send, and who will go for us?" Then said I, "Here am I; send me"...

hilzoy: "If Hans von Spakovsky says it, then surely it must be true! (Dissolves in giggles): 'Hans Von Spakovsky, “I haven’t seen any evidence of actual violations of the law, which is usually a basis before you start an investigation. Adam Schiff seems to be copying Joseph McCarthy in wanting to open up investigations when they don’t have any evidence of wrongdoing”...'

Paul Waldmann: The Dishonest Smearing of Ilhan Omar: "this punishment of criticism of Israel is exactly what the freshman congresswoman was complaining about, and has on multiple occasions. The fact that no one seems to acknowledge that this is her complaint shows how spectacularly disingenuous Omar’s critics are being...

Mark Milian: @markmilian: "Coinbase says it accidentally hired a group of mercenaries, who sold cyberweapons to Saudi Arabia and Sudan, and is now firing them...

Robert Reich: @RBReich: "In less than a week, we've learned that the President of the United States: --Tried to block a merger to punish a news outlet --Knew about the release of illegally obtained email --Paid off a mistress, violating election law --Demanded security clearance for a family member...

Charles Moore: Will the Daily Mail’s volte-face on Brexit make the slightest difference? | The Spectator: "My guess is that Mail readers will find it less fun hating the European Research Group than the ‘metropolitan liberal elite’, but the traditional key to tabloid success is the Glenda Slagg principle of kicking someone, then praising them, then kicking them all over again. My only concern for the Mail’s future lies in the fact that Geordie Greig comes from the officer class. This violates ancient Mail rules by which the Harmsworth family are remote, regal figures beloved by their serfs, and the actual dirty work is done by foul-mouthed NCOs who never leave the office. Geordie goes out to dinner, has many friends, enjoys life, and wishes to win the respect of peers (in both senses of that word). He is a talented journalist, but these are severe handicaps to running Associated’s charnel-house...

Noah Smith: Bangladesh and India Pursue Different Economic Models for Growth: "When a country first shifts from agrarian poverty to industrialization, it tends to start out in light manufacturing.... Later it masters more complex manufactured products, and finally it progresses to inventing its own cutting-edge technology. Thus, each country’s development tends to look a bit that of nations that already went through the process. That certainly seems to describe the experience of South Korea and Taiwan.... Recently, one of the biggest beneficiaries of this process has been Bangladesh. The garment industry accounts for more than 80 percent of the South Asian nation’s export revenue, and about a fifth of its gross domestic product...

I Concede: The Haters and the Trolls and the Botnets of Macedonia Have Rendered Their Verdict, and I Accept It: @Austan_Goolsbee has won, and will represent Neoliberal Economic Academia in the next round of the 2019 Chief Neoliberal Shill Twitter Challenge. Austan Goolsbee will face off against noted ex-academic and San Francisco flaneur @Noahpinion in the semifinals of the meetup region.

Truth be told, it is probably for the best: I would never in a million years have had the ovaries to present Rahm Emmanuel with a dead fish to tell him what I thought of him:

Can I pull it out at the last minute? I'm still behind 53-47, in spite of a million-twitter-impression day yesterday: Neoliberal: @AustanGoolsbee (5) Former CEA Chair and Professor at U Chicago vs. @delong (4) Economic Historian at Berkeley_

Paul Krugman: America the Cowardly Bully: "This is the way the trade war ends. Not with a bang but with empty bombast. According to multiple news organizations, the U.S. and China are close to a deal that would effectively end trade hostilities. Under the reported deal, America would remove most of the tariffs it imposed last year. China, for its part, would end its retaliatory tariffs, make some changes to its investment and competition policies and direct state enterprises to buy specified amounts of U.S. agricultural and energy products. The Trump administration will, of course, trumpet the deal as a triumph. In reality, however, it’s much ado about nothing much.... It will repeat what we saw on the North American Free Trade Agreement, which Trump denounced as the 'worst trade deal ever made'.” In the end, what Trump negotiated... was very similar to the previous status quo. Trade experts I know, when not referring to it as the Village People agreement, call it 'Nafta 0.8': fundamentally the same as Nafta, but a bit worse...

An elasticity of taxable income to the after-tax share of 0.2. That seems low, but what do I know? But 85 years was a long time ago: this seems only a data point telling us a little about where the envelope of possibilities lies: Christina D. Romer and David H. Romer (2011): The Effect of Marginal Tax Rates: Evidence from the3 Interwar Era: "This paper uses the interwar period in the United States as a laboratory for investigating the incentive effects of changes in marginal income tax rates. Marginal rates changed frequently and drastically in the 1920s and 1930s, and the changes varied greatly across income groups at the top of the income distribution...

Cosma Shalizi (2011): Extended Harmony, and Tiger Repellent Drumming: "If you want capitalism, but you find a state that powerful very scary... you have a problem.... You might... decide that such power is perfectly A-OK, so long as it's used for ends you approve of and there's no danger of the people taking over. (Hence Hayek's... viewing Pinochet's reign of terror as less damaging to [what he saw as] liberal values than the British National Health Service.) Or you might try to find ways of taming or domesticating state power, of civilizing it. (I think that has a pretty good track-record, but who knows how long we can keep it up?) What you cannot do, with any intellectual honesty or even hope of getting what you want, is pretend that capitalism can work without a powerful, competent and intrusive state. As Ernest Gellner once wrote, 'Political control of economic life is not the consummation of world history, the fulfilment of destiny, or the imposition of righteousness; it is a painful necessity'...